The incoming interim Chief Executive Officer (CEO) of insurtech Vesttoo has stated that following initial conclusions from an in-depth investigation into fraudulent LOCs, the company has discovered that numerous external factors caused the current crisis.
Ami Barlev, who has served as a member of Vesttoo’s Board since 2021 and was confirmed earlier this week as the new interim CEO of the firm, has made a statement on the current fraudulent collateral issue engulfing the insurtech.
He explains that the company’s in-depth instigation, undertaken by leading forensic investigation experts in conjunction with an international law firm engaged by Vesttoo’s independent ad hoc committee, has produced initial conclusions and recommendations which have been fully adopted.
“We have learned that a number of factors, external to the company, led directly to the current crisis, including the involvement of certain foreign banks and financial institutions,” says Barlev.
“Vesttoo has also initiated immediate changes in its management, removing some individuals from their positions, also as a result of the findings,” he adds.
Although no names are mentioned in Barlev’s statement, it was confirmed by the insurtech last week that co-founders Yaniv Bertele, CEO and Alon Lifshitz, Chief Financial Engineer were placed on paid leave amid the investigation.
Barlev continues: “We have also unfortunately had to let many talented people go from the company, as a result of the damage caused. These steps were taken only to secure the financial viability of the company and not as a result of the findings.”
In early August, Vesttoo confirmed that it will be letting go of some of its employees, as it focuses on regaining its footing and “emerging from this challenge stronger than before.”
The new interim CEO also explains that Vesttoo will “decisively pursue legal actions against all parties” responsible for the fraud and subsequently caused harm to both the firm and its clients. He also notes that Vesttoo will “take all necessary steps to recover all and any damages, and we will vigilantly protect our partners, customers and our employees.”
“At this stage, we can firmly assure that Vesttoo’s remaining core team of professionals, who are of the highest caliber globally in the fields of insurance, capital markets and technology, are free of any suspicion, and our company continues to operate because of these talented individuals. We thank everyone who continues to support us,” says Barlev.
Importantly, he also emphasises that Vesttoo has tightened its know your customer (KYC) procedures, a vital financial market process for tackling fraud, and a mandatory process for participation in many markets.
Additionally, Vesttoo is adopting “stringent legal procedures aimed at increasing the level of corporate governance and business integrity at the Company,” says Barlev.
“We will demonstrate zero tolerance towards any violation of law and pursue legal actions against any party that caused damage to the Company in the most assertive manner,” he concludes.
The statement from the interim CEO follows news that Aon’s White Rock has secured a temporary restraining order to freeze the assets of Vesttoo.
